This invention relates to electronic trading systems. More particularly, this invention relates to fractional ownership control systems and methods that provide for the electronic control of fractional ownership interests in personal property, real property and other legal interests.
Fractional property ownership is common in our society. People and corporations may co-own almost any type of personal or real property in a variety of arrangements. Each co-owner may, for example, have an undivided interest in personal or real property with the right to use the entire property at any time. This is sometimes referred to as a “tenancy in common.” Condominiums and co-operative ownership (sometimes referred to as “co-ops”) are additional examples of types of real property fractional ownership arrangements.
In some arrangements, co-owners may have the right to use property only during specified periods of time. Co-owners of a computer system, for example, may own a time period during which their jobs are processed. Co-owners of real property, for example, may each have an undivided interest in an entire property, but only have the right to use the property during a specified period of time. In some time-based arrangements, co-owners may own real property only during particular time periods, such as a week, during which the owners actually own and may use the property. These are sometimes referred to as “deeded weeks,” and are used typically in time-share vacation ownership arrangements. In other vacation ownership arrangements, co-owners have points that they can use to obtain particular weeks of use at particular properties. Co-owners in this type of arrangement may have only a right to use the property, and not a direct ownership interest in the property. In still other vacation ownership arrangements, people own weeks of use in a network of properties, rather than any direct ownership interest in a particular property.
Fractional ownership can decrease the value and liquidity of real and personal property. Would-be purchasers must deal with each owner in order to obtain the entire interest in the property. This may increase transaction costs for the purchase, especially when co-owners are geographically diverse parties. In arrangements where people own weeks of use in a network of properties, rather than any direct ownership interest in a particular property, the value of the sum of the parts may be significantly less than the value of the whole. A purchaser of each co-owners' interest would only obtain each co-owner's right to use the property. If property were purchased from the real owner (i.e., the network), the purchaser would have to take the property subject to all of the co-owners' (i.e., users') rights.
One approach for increasing the liquidity of co-owned real property has been to provide each co-owner with drag-along rights. Drag-along rights include the right of a co-owner to require other co-owners to sell their interests in a commodity at fair market value when the co-owner wishes to sell his or her own fractional interest in the commodity. Drag-along rights may increase the liquidity of a commodity because they may ensure that a single co-owner can compel the sale of, and a purchaser can purchase, the entire interest in a commodity.
Even the use of drag-along rights, when coupled with a small number of co-owners, may not provide for the optimal value and liquidity of real property if the rights cannot be managed and transferred in an efficient manner. Each owner may, for example, need to execute necessary transfer documents (e.g., contracts of sale, deeds, etc.), and each owner may need to be compensated for his or her interest in the property. The difficulty in transferring property subject to drag-along rights may be exacerbated if co-owners are geographically disparate.
It would be desirable, therefore, to provide an electronic ownership control system that separates the ownership of commodities from the management of the commodities by putting owners into direct ownership of commodities that have traditionally been right-to-use types of commodities, or that have traditionally been owned by a single party who sells the output of a commodity.
It would also be desirable to provide an electronic ownership control system that allows geographically disparate potential co-owners to coordinate their interests and jointly acquire commodities.
It would also be desirable to provide an electronic ownership control system that provides for the electronic transfer of ownership in fractionally-owned commodities.
It would also be desirable to provide an electronic ownership control system that provides for the transfer of ownership in fractionally-owned commodities that are co-owned subject to drag-along rights.
It would also be desirable to provide an electronic ownership control system that provides for notifying co-owners of a potential sale of another co-owner's interest in a co-owned commodity.
It would also be desirable to provide an electronic ownership control system that provides for notifying co-owners of a potential sale of a co-owned commodity in which the other co-owners have drag-along rights.
It would also be desirable to provide an electronic transfer ownership system that provides for allowing co-owners of a commodity to purchase the interest of a selling co-owner when the selling co-owner attempts to sell his interest in the property.
It would also be desirable to provide an electronic ownership control system that provides for notifying co-owners of an opportunity to sell their interests in a co-owned property when a co-owner attempts to sell his or her interest in the property (sometimes referred to herein as “tag-along” rights).
It would also be desirable to provide an electronic ownership control system that provides non-user co-owners with opportunities to exercise drag-along or tag-along rights.